Government announce 95 per cent mortgage scheme to help people onto the property ladder
3 March 2021, 15:38
Rishi Sunak announced today in the 2021 Budget that five per cent deposits will be available for people struggling to get a foot on the property market.
The Government announced today the mortgage guarantee scheme which will allow people to get onto the property ladder with a five per cent deposit.
Rishi Sunak revealed the return of low-deposit mortgages during the 2021 Budget announcement in the House of Commons.
The new policy will give people who do not have large amounts of money for a deposit the chance to move on from renting to buying.
During the pandemic, most lenders ditched the five per cent mortgage option to home-buyers, offering a 90 per cent loan-to-value policy.
However lenders such as Lloyds, Natwest, Santander, Barclays, and HSBC will now be offering 95 per cent.
This means if you wanted to get a £200,000 home, they would now need to give a deposit of £10,000 (five per cent), opposed to £20,000 (ten per cent).
Last year, Prime Minister Boris Johnson said that he wanted to change the 'generation rent' to the 'generation buy'.
The scheme will run for properties worth up to £600,000.
Addressing the House of Commons about the change in mortgage deposits, Rishi Sunak said: "There is still a significant barrier to people getting on the housing ladder - the cost of a deposit.
"I am announcing today a new policy to stand behind home-buyers, a mortgage guarantee.
"Lender who provide mortgages to home-buyers who can only afford a 5 per cent deposit, will benefit from a Government guarantee on those mortgages.
"And I am pleased to say that some of the country's largest lenders – including Lloyds, Natwest, Santander, Barclays, and HSBC will be offering these 95 per cent mortgages from next month."